Future Prospects for Music and Technology

Musictech’s Ben Morgan on The Paradigm Shift in Music Consumption

Jenny Toomey and Kristin Thomson

Monday, November 15, 1999

“Technology is far outpacing the ability of the music industry to keep
up, and the SDMI battle to encrypt music is a short-term solution at best.
Through articles and the Musictech list I’ve learned that Microsoft’s
“secure” format was hacked the day it was released, and DVDs, which were
supposed to be the most heavily encrypted thing ever, have been cracked
as well. A list member said it best when he said that it’s simple physics
— if you encrypt a sound file, you can find a way to decrypt it.” — Ben Morgan

Kristin and I spend hours and hours each day scouring the internet looking
for the best and brightest music-technology discussions. One of the jewels
in our bookmark list is Musictech — a listserv created by Ben Morgan.
In this short interview he touches on many of the main technological themes
that are hot issues now. Read on and get current! For more info on Ben’s
coming-of-age in the music industry, see his bio on the sidebar.

J=Jenny Toomey
B=Ben Morgan

Jenny: What is Musictech?

Ben: Musictech is a listserv — a mailing list for discussions about
developments in technology and their specific impact on the music business.
It’s not really that large, but through my old industry connections and
visiting a music/internet expo I got a lot of people to sign up from lots
of different areas of the music business.

J: Who is on the list?

There’s label people, artists, distributors, music publishers, lawyers,
technology developers, and people from new media companies. A few people
who are interested purely as consumers, but for the most part everyone
involved works in the music industry on some level. Its usually pretty
quiet and I think a lot of people there are just lurking for information,
but when discussion does break out it can get pretty interesting.

J: When and why did you start the list?

B: Well, it began in March or April of 1999. At that time I was really
interested in the concept of digital distribution in particular.

When I was still at CDNow my boss had asked me to get some compilation
CDs from radio stations she was doing ad buys on into the “store.” But
CDNow is just an interface to the Valley One-Stop Distribution catalog,
and only distributed titles end up there, so getting a CD into the website
that I worked for was nearly impossible. Despite all this technology,
getting a physical product into stores was still a nightmare even in Internet retail.

This is when I first started seeing that if artists could easily sell
their music through their own website, then the scarcity of distribution
could be eliminated entirely. This got me really excited, and I started
following the developments in digital distribution very closely.

When I started the list, I originally thought it would be a forum for
debating the merits of encrypting the music. SDMI
was still pretty new and I saw the entire debate there seemed to hinge
on whether or not people would be able to develop a system capable of
encrypting music.

I wanted to learn more about what was going on, but also see if I could
get “traditional” and new media industry people together to talk about
the changes and hopefully everyone would start to think about the future
and how they could still have a job yet give more back to the artists.
I figured that even though I didn’t work in the music industry anymore,
I knew a lot of people who did — good people who actually loved music
and the artists, who would also want to see things change for the better.

So on the one hand it was curiosity and interest in the subject, and
on the other hand my agenda is definitely to try and get people to start
talking about what’s going on with the hope that everyone would get enlightened
as to the opportunities the changes hold for creating a better system.
Also, down the road I might want to get back into the music business myself
if I can find an aspect of it that is exciting and involves music, but
not raping the artists, so musictech is also about exploring what’s going
on with an eye to getting more involved if and when I feel things have
gotten to the point where it is a good system. I like to think that it
will, but it might take along time. And if the wrong people take advantage
of the technologies first, then we might end up stuck where we are now
— forced to deal with assholes and sell off profits in order to get your
music heard.

J: What are most important questions confronting independent musicians
regarding the new technologies, and why?

B: Well, right now things are in a crazy state of transition. We’re
in the end phase of a paradigm in music consumption defined by “the album”
— one that began with the invention of the phonograph. This period was
one in which the public had its choices defined by what the music industry
decided was fit to offer them. It was simply too expensive for artists
to produce and distribute an album themselves, and the the artists were
dependent on companies with money. We find this paradigm coming to an
end just as consumer technology has become affordable enough that an artist
can own all the necessary technology to produce and distribute an album
all by themselves. But just as this finally becomes possible, it becomes
very difficult to make a living off of selling albums, since technology
has also enbled the consumer to reproduce perfect copies with ease.

Ironically, just as the tools become available for the artist to empower
themselves, the technology enables the consumer to get the product without
paying for it. The “album” as we know it is simply going to become too
easy to reproduce perfectly and send off to your friends. We’re not there
quite yet, but don’t think we won’t be soon. Encryption simply cannot
succeed long enough to keep control over the use of sound files. The album
won’t be a product that artists can control the use of for very much longer,
and if musicians wish to continue to make a living selling music products
they will have to be something more than just songs and packaging. Personally,
I hope artists continue to make records, but in order to really make a
profit they’ll have to come up with new products that aren’t so easily reproduced.

J: How have conversations on Musictech influenced your opinion of digital downloads?

B: I used to think digital distribution held the key to empowering
artists. Mostly due to discussions on the musictech list, I’ve come to
believe that the music product as it currently exists — being a sound
file and artwork/liner notes, will simply be too easy to reproduce rapidly
and effortlessly in a few years. You can already burn CDs on your computer
at home. The only things missing to totally eliminate the ability to control
the use of music are: copying speed, ease of distribution amongst friends,
and the nice liner notes you get when you buy it. That means all that’s
missing is a CD burner that works really fast, the ability to send the
entire sound file via email to your buddy, and better printers that can
reproduce nice album packaging at home. You have the physical product
the labels insist is so important, yet the tools to copy it perfectly
and rapidly without the need for their warehouses, distribution, and retail
space. Looking at how fast the internet and other technology has come
in the last three years, I don’t think it will be very long until technology
enables you to copy a CD, send it to your friend, and print out a copy
of the packaging using a scanner and a printer. 5-10 years, maybe, until
bandwidth and consumer cost issues are resolved? I’d love to see research
on how far off these things are.

Technology is far outpacing the ability of the music industry to keep
up, and the SDMI battle to encrypt music is a short-term solution at best.
Through articles and the list I’ve learned that Microsoft’s “secure” format
was hacked the day it was released, and DVDs, which were supposed to be
the most heavily encrypted thing ever, have been cracked too. A list member
said it best when he said that it’s simple physics — if you encrypt a
sound file, you can find a way to decrypt it. I don’t think it’s even
an issue anymore — SDMI will fail after possibly a few successful years,
and then the industry will face the fact that they can’t control the music
product as it currently exists anymore.

So we need new music products. That’s what I’m interested in now.

J: How should artists use the the tools currently available to them
to maximize their profits?

B: I think it’s definitely important to realize that physical production
and distribution still has a few years in it but it IS going to decrease.
Right now digital distribution is going to grow very fast, but there are
lots of different formats and companies right now and your guess is as
good as mine as to what the best one will be. I think its important to
take advantage of the marketing potential of giving a way a new song or
two as mp3s — this will generate interest and increase physical sales,
and lost revenue isn’t really lost if the person wouldn’t buy it anyway.
Someone on the list said free mp3s tied with radio in a recent poll as
the reason consumers had for buying a record. That’s from nowhere to on
a par with radio in less than two years. That’s phenomenal, and artists
should embrace the power that has.

J: How important is it for an artist to have a website?

B: I think it’s crucial to have a website. The one for my band is out
of date and I never have time to work on it but you need at least something
up there. If people are interested they will look for it, and they usually
can find what they are looking for.

J: What do you think about online label sites?

B: When thinking about online label type of sites, my gut instinct is
to avoid sites that charge money for formats that are relatively new for
now, and to see what kind of deals you can get from sites that offer free
downloads of mp3s.

I know many sites have exclusive contracts, so be careful what you sign.
I think it’s too early to pick a front runner, and bands that sign deals
now will be guinea pigs.

Eventually one or two of the online music content sites that sell digitally-distributed
music will either develop a tremendous fan base like mp3.com has, or will
make all the right partners and start to develop brand recognition. The
ones who get powerful first are the ones to watch — they could easily
become as bad as the corporate labels, demanding fees or giving bad royalty
rates. Even though they might have the best market penetration, they also
might be the biggest weasels to work with if the wrong people are running it.

I think it should be viewed as signing with a major — it’s a gamble
that might make you rich, but could also screw you. If you don’t feel
like people who want to sign you are being genuine or you aren’t sure
they really will go to bat for you, then for God’s sake don’t sign anything.
If you’re stuck in an exclusive online contract with a company that buries
you under other priorities, then you won’t be able to take advantage of
future developments that might be a lot better. And new developments are
coming along all the time right now.

I think we are going to see a shift to the business model soon where
the consumer pays a micropayment for a song or gets it free with an ad.
This is dependent on remote devices that connect to the net or a database.
Companies offering this, in my opinion, have the right idea. One suggestion
I might make is to ask any potential online record company what their
plans are in this arena. This will take the emphasis off the physical
product, and thus will attract an entirely different consumer than the
one who wants the album at home and will therefore first see if they can
copy it for free rather than pay for it.

And more than anything, keep it in the back of your head that the record
as we currently know and love it, is on its way out as a way to make money
— it will just be too hard to control in the future despite any encryption
nonsense. Asking companies what their plans for future product concepts
are — if they don’t have any, then they are a short-term thinkers and
that’s what you should expect from them.